A power of attorney (POA) can serve various purposes if executed correctly.
A person with power of attorney can represent you in legal claims brought against you, engage in contracts on your behalf, buy property, receive cash or other payments on your behalf, and buy property.
But what about when it comes to life insurance? Can a POA cancel a life insurance policy?
The ability to delegate one’s decision-making authority to another person can be accomplished using a legal document known as a power of attorney. Many people are curious about whether or not a power of attorney can revoke life insurance or alter who the beneficiaries are.
Here in this article, you’ll get an overview of whether or not a power of attorney can cancel your life insurance policy.
Can A POA Cancel A Life Insurance Policy?
The short answer to that is no. A power of attorney cannot alter your life insurance policy. Let us discuss further below what this means.
Because it provides money to pay for your financial commitments, a life insurance policy shields your loved ones from the adverse financial effects caused by your passing should you pass away.
A power of attorney grants the holder many different abilities, but it cannot change or terminate this contract.
The fact that the beneficiaries have a legal claim to this money makes this aspect of the power of attorney paperwork a crucial one. If you cannot make decisions for yourself, another individual will not be able to take advantage of you or your family.
What A POA Can And Cannot Do
A power of attorney also does not give the representative the authority to alter the beneficiary designation on a life insurance policy after the policyholder has passed away.
The beneficiary designation is null and void when a general or limited power of attorney is in place that specifically grants the agent the right to change beneficiaries. This power of attorney enables the representative to sign a “change of beneficiary” form as long as the policy owner is still alive.
With a power of attorney, the agent can name anyone as the account’s beneficiary, provided that person acts in the principal’s best interest. A power of attorney, often known as a POA, is a legal document that gives one person (the agent) the authority to make choices on behalf of another person (the principal, grantor, or donor) if the principal is unable to make those decisions for themselves.
Although a power of attorney cannot renegotiate the structure of your life insurance policy, you still need to exercise caution when choosing one. Your power of attorney retains the authority to sign contracts on your behalf, accept cash transactions, and manage your financial affairs.
Suppose your power of attorney does not pay a life insurance premium. In that case, this could result in the cancellation of the policy for nonpayment of premiums, which would allow you to sidestep the legal safeguards normally afforded to you.
In conclusion, a POA cannot directly cancel your life insurance policy. However, your POA can terminate your policy if they neglect to pay the premium.
